State Tax After Federal Reform: Handling Your Liability

At a Glance...

Have you considered the state impact of the deemed repatriation? Is it beneficial to calculate your interest expense limitation on a combined basis? Can you take Pennsylvania bonus depreciation? Do you want to decouple from the state tax impact of federal tax reform entirely?

In this four-part video series, Kyle Sollie and Sebastian Watt discuss handling the state impact of federal tax reform. Jump right to what's important to you:

1. Transition tax and repatriation, part 1:

1. Determining your inclusion
2. b. Watch out! Tax on the actual repatriation (CA Example)
3. c. Mitigating the tax: factor representation

2. Transition tax and repatriation, part 2:

1. Excluding as not unitary — but which year do I test for unity?
2. Challenging the tax: Kraft
3. Don't lose your NJ NOLs!
4. The double-deduction (a look at NY and PA)
5. GILTI, state DRDs, GILTI + add-back = double tax surprise

3. Investment in business assets: bonus depreciation and interest expense

1. a. Don't lose your PA or Philly depreciation
2. "Accidental" conformity to 100% bonus: IL and RI
3. Calculate your interest expense limitation on a consolidated basis — even in separate states

4. Decouple entirely: how rolling IRC conformity may not be rolling conformity

This article is presented for informational purposes only and is not intended to constitute legal advice.